Friday, March 16, 2012

According to the Above the Law blog, the motion to dismiss the class action lawsuit filed against the Thomas Jefferson School of Law has been DENIED! Also, about 20 more law schools are liable to get sued for some form of misrepresentation. This denial is a cause for celebration, and hopefully these lawsuits will make it into the discovery stage. I cannot wait to see what kinds of incriminating emails and documents leak out during discovery (assuming that they have not already been destroyed or sequestered in a dusty locked chest surrounded by ancient equipment in a cobweb-strewn dimly-lit forlorn science department subbasement).

Earlier this month, New York Magazine published a nice article about the law school lawsuits where you can learn more about the intrepid attorneys who are bringing filing the lawsuits. Here are some quotes from the article, "The Case(s) Against Law Schools":

Nationwide, there are two aspiring lawyers with passing bar-exam scores for every one open job; in New York State, the ratio is even more lopsided, with 9,787 passing the bar in 2009, then competing for roughly 2,100 new positions.

So, not only are the job prospects crappy, but the cost has gone through the roof, rising over four times faster than undergraduate tuition.

The American Bar Association, which accredits the bulk of law schools in the U.S., has signaled solidarity with the defendants. In January, William Robinson, the head of the ABA, told Reuters that aspiring lawyers make “a free choice” to pursue a J.D. “It’s inconceivable to me that someone with a college education, or a graduate-level education, would not know before deciding to go to law school that the economy has declined over the last several years and that the job market out there is not as opportune as it might have been five, six, seven, eight years ago,” Robinson said. (An ABA spokesman said Robinson would not comment directly on the ongoing litigation.)

I wonder if Mr. Robinson is capable of conceiving that the entire industry, from NALP to the law schools to the ABA which gives implicit sanction to the law schools employment statistics and reporting methodology, may have collectively committed a massive fraud. ("Danger, Will Robinson!") Of course, I don't buy the "sophisticated consumer" argument, which I'll eviscerate in my next post. Coincidentally, Robinson (probably very knowingly) fudged the truth when he tried to imply that employment problems in the legal job market are a new phenomenon when in fact JD overproduction has been a problem for years if not decades.

"According to Above the Law, the motion to dismiss the class action lawsuit against the Thomas Jefferson School of Law has been DENIED! I don't know what kind of sandwiches were delivered to the ABA's offices today, but I sure wouldn't want to eat them." (For those who didn't get the joke, you are supposed to infer that the denial of the motion to dismiss was akin to big stinky shit sandwiches being delivered to the ABA's offices for lunch on Wednesday.)

Among alumni, opinions are split, as you might expect, according to which side of the unemployment line the graduate falls on. “Mathematically, it’s a ton of graduates, yes, and no, there aren’t enough jobs for them,” Daniel Gershburg, a 2006 graduate of NYLS and an
attorney with a successful practice in Manhattan, says. “At the same time, what are schools supposed to say? ‘No, no, don’t come here! Run for your lives!’ Where does personal responsibility start?”

Yes! That is exactly what the law schools, colleges, universities, and the ABA are supposed to say. These entities, all or almost all of which receive federal taxpayer-funded student loan dollars (the law schools, anyway), are supposed to have a duty to look out for the best interests of society. They are supposed to be socially responsible. Instead, they have been acting like slimy snake oil and used car salesmen. Furthermore, being honest is the right thing to do. It is the ethical thing to do. It is understandable that they might not want to physically bar the doors and tell students to run in the opposite direction, but at the very least they shouldn't be publishing what may be fraudulently misleading employment statistics.

Are prospective law students savvy, college-educated consumers or naive twenty-somethings easily taken in by rosy employment projections?

I'm going to eviscerate the "sophisticated consumer" argument in my next post, so I won't address it here. However, let me point out that even if a merchant's consumers are sophisticated and should know better, that does not (or should not, in my book) give him a license to commit outright fraud, at least not if his statements are presented in such a context where they are meant to be taken seriously (such as a serious, formal sales brochure). Should Madoff have been been exonerated on the basis that his victims were wealthy sophisticated consumers who should have known better than to fall for a Ponzi scheme? Should Enron have been let off the hook on the basis that many of Enron's victims were, presumably, sophisticated investors (mutual funds, etc.)?

That question was one of several before New York County, N.Y., Supreme Court Judge Melvin Schweitzer during a two-hour hearing on March 12. The state trial judge was considering a motion to dismiss a lawsuit brought by nine graduates of New York Law School against their alma mater.

The plaintiffs, seeking class status, allege that that they were lured to enroll by misleading postgraduate employment figures published by the school. They filed suit in August, claiming that the school committed fraud and negligent misrepresentation, and violated the state's general business law regarding deceptive acts and practices in reporting for several years beginning during the mid-2000s that about 90 percent of its students had secured jobs nine months after graduating.

It is good to see that they have a few different causes of action--fraud, negligent misrepresentation, and violation of a New York business law about deceptive acts and practices. I sure hope that they can prevail on at least one of those claims.

Volpe argued that the law school offers a number of disclaimers about the employment information it releases. "No reasonable person," he said, would read those disclosures and conclude that he had a 90 percent or greater chance of landing a job within nine months of graduation.

The Plaintiffs should ask: If that is the case, when why exactly did the law school publish that statistic? If that number wasn't meant to be taken seriously, then what was the purpose in publishing it? What effect did the law school intend the 90% employment figure to have on prospective law students?

Could it be...could it possibly be that the school wanted prospective law students to think that it meant that 90% of all graduates found high paying work in the legal profession? Or was it just published for amusement purposes or to fill space in the brochure? Was the publication of facially false and misleading statistics a sign of good will towards prospective students on the law school's part?

Also, if the school's brochure were discussing employment statistics and the school KNEW that those statistics were facially false, then why didn't it at least publish more detailed statistics and endeavor to determine and publish accurate statistics? Could it be...could it be that the school was intentionally trying to mislead prospective law students?

Everyone, including the judge, can probably infer the correct answers to those questions.

In my opinion, this law school fully intended to mislead prospective law students knowing that all of the other law schools (and NALP) were doing the same thing (and that such aggregate misleading statistics would reinforce one another) and that prospective students would assume that these statistics had the implicit sanction of the ABA. (That's all just my opinion; I'm not claiming that it's fact. Don't SLAPP*** me bro.)

I don't know if attorneys David Anziska, Jesse Strauss, and Frank ­Raimond (who are handling the class action lawsuits for the Plaintiffs) are reading this or will ever have the time to read this, but if so, I sure hope that you hammer the Defendants with those questions.

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comments:

The first major body blow to the industry will come when a Wall Street bank files suit for fraud, claiming that the value of its "asset" backed paper was misrepresented by ABA accredited schools. The schools can say anything they want about why students attend law school - why does anyone do anything anyway? However banks rely only on an assessment of commercial risk, which was misrepresented to be lower than it is, in order to keep the gravy train running.